Red Sea tension may risk disrupting global supply chain for a year

Tokyo/Sanaa – Due to the conflict between Houthi rebels and the group of Western countries in the ‘Red Sea’ area, there has been tremendous tension. This tension is affecting the global supply chain, and there is a danger of the supply chain being disrupted for at least six months to a year, a top company in the shipping sector has warned. Due to the ‘Red Sea’ tension, the world’s major shipping companies have changed their routes and stopped traffic through the ‘Suez Canal’.

After the start of the Israel-Hamas war, the pro-Iranian Houthi rebels threatened to target countries that came forward to help Israel by supporting Hamas. After this, since November, Houthi rebels have started attacking merchant ships travelling through the Red Sea. Due to these attacks, there has been huge damage to the commercial traffic in the Red Sea, and the prices of many products, including fuel, have started increasing.

The number of ships travelling through the Suez Canal has declined by 39 per cent, and cargo traffic has declined by 45 per cent since December. The Suez Canal carries 12 to 15 percent of the world’s trade traffic. For this reason, disrupting the movement of goods in this maritime area is having an impact on global trade, and the United Nations recently drew attention to this. After this, a Japanese company named ‘Mitsui OSK Lines’, a top company in the shipping sector also underlined the threat to the supply chain.

‘The attacks and increasing tension in the ‘Red Sea‘ are historic events. This tension is likely to persist for the next few months. Even assuming an extreme worst-case scenario, there is a risk that the global supply chain could be disrupted for up to a year,’ said Takeshi Hashimoto, head of Mitsui OSK Lines. At present, the world’s shipping companies have enough ships to handle the tension in the ‘Red Sea’. However, as demand for products increases globally, there could be a shortage of vessels, and this could disrupt the supply chain, Hashimoto warned.

Container ships and companies used for sea transport have increased their prices. At some destinations, freight of more than a million dollars per day is being charged for the tankers required to transport fuel. Analysts and media are warning that this will lead to a new wave of inflation in the world due to an increase in the prices of products.

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